Public Limited Company
What is a Public Limited Company?
The Public Limited Company in India enjoys all the business rights and features of the Limited Credit. A limited public company is listed on the stock exchange to raise money for the general public. Therefore, Limited Public Companies must comply with most government regulations and establish a Limited Public Enterprise Company.
The Public Limited Company registered under the provisions set out under the Companies Act, 2013. A Member Company Limited registered in India enjoys the features of Limited Liability and this type of business is permitted to raise funds for the public by issuing shares.
Also, the rules and regulations of the Public Limited Company are strict and stricter compared to the Private Limited Company. However, it is best to include the Public Limited Company as it provides the benefits of a Private Limited Company with features such as easy transfer and share ownership.
Documents required to install Public Limited Company
It is very important to submit all the required documents regarding the registration of the Public Limited Company to avoid legal problems:
- Passport-size photographs of all Directors
- Copies of IDs of all Directors – Aadhar Card, Voter Card, PAN Card.
- DSC (Digital Signature Certificate) for all directors
- DIN (Director’s ID number) for all directors.
- In the event that the office is a leased premises – Lease agreement.
- If the office is a managed area – property ownership documents
- Water credit and electricity bill for the business area.
- No certificate of opposition from Landlord.
- Organization Memorandum (MOA)
- Organization Documents (AOA)
Process for obtaining registration with Public Limited Company
Step 1: It is necessary to meet all legal requirements such as Number of Directors, Number of shareholders, minimum amount of payments already made. Additional registration steps will only be completed once this step is completed.
Step 2: The next step is to get the DSC and DIN of the Company directors. Only a natural person can be a director and not any person or organization such as LLPs or financial institutions. It is not necessary for the Director to be the shareholder in the Company.
Step 3: To be recognized as a registered office you need to have the correct Company address. The registered office address must be registered with the Registrar of Companies and the office under his or her jurisdiction. This office address must be spelled correctly as all business-related documents will be sent to the registered office address. The registration fee will depend on the company’s approved fee.
Step 4: Prior to the registration process, the Company name must be approved by the ROC. In a Limited Public Company, the name must be limited to “Limited”. This application will be submitted in the form of a RUN of the Department of Business Affairs. It is best to give a list of words in the order of preference, in case the name is missing.
Step 5: Once the Company name has been approved the important MoA and AoA Company documents need to be used.
Step 6: Once the documents are ready they need to be submitted to the ROC for verification.
Step 7: Once the verification is completed the ROC registers the company and issues a support certificate and a Company CIN.
Step 8: The business cannot be started immediately after receiving the COI. An entity must apply for an initial certificate within 180 days of COI stating that all registrants have paid the registration fee.
Registration requirements for Public Limited Company
Various other laws and regulations are enshrined in the Companies Act, 2013 to establish a Limited Public Company in India. Here is a list of checks that one should know when registering a Public Limited Company:
- A total of 7 shareholders are required to form a Public Limited Company.
- At least 3 directors are required to form a Public Limited Company.
- A small budget of Rs.5 lakh is required.
- The DSC of one of the directors is required for the submission of proof of identity document and proof of address.
- Directors’ DIN is required.
- An application for a Company Name nomination must be made.
- An application that incorporates a phrase of the main purpose of the company is made. This clause will define the Company’s main objectives after consolidation.
- The application is submitted to the ROC and the required documents such as MOA, AOA, the appropriate form to complete DIR-12, Form INC 7, and Form INC -22 are required.
- Payment of registration fee determined by the ROC.
- Once the ROC has approved the company it must apply for a start-up business certificate.
Benefits of registering a Public Limited Company in India
Here are the benefits of registering as a Public Limited Company:
- Different Legal Entity: A limited public company is considered a separate legal entity from shareholders. A limited public company is permanent and can have PAN, bank account, authorization, contracts, licenses, assets, and liabilities.
- Multiple ways to earn money: A limited public company collects funds from individuals and financial institutions. Funds may also be collected from equity shareholding, preference shareholding, or debt.
- Easy transfer of shares: It is one of the major benefits of Public Limited Company, shares that can be easily transferred by a shareholder to other legal entities – either one person or an organization in India or abroad. The company director can also be changed to ensure the business lasts.
- Limited Credit: Public Limited Company shareholders are provided with limited credit protection. In the event of an unexpected debt, the same will be limited to the company only and does not affect shareholders in any way.
- Growth opportunities: As an organization has a large financial base, development opportunities are also great, especially if there is an organization with open challenges.
- Management: The organization is governed by a Board of Directors. This Board of Directors is elected by the investors.
Limited Company Corporate Annual Rules
Board Meetings:An unregistered Public Limited Company is required to hold at least 4 board meetings in accordance with Section 173 of the Companies Act, 2013.
Appointment of Auditor-General:The auditor is required to be appointed in terms of Section 148 (3) and Act 6 (2) and Rule 6 (3A) of the Companies Act, 2014. In this form, CRA 2 must be included. It is important to note that the first appointment of an auditor must be made within 30 days of the Board meeting or 180 days of the financial year, whichever is earlier. If an unusual space arises, the same should be included within 30 days.
Deposit Refund:Deposit refunds must be completed in the ROC under its jurisdiction under Form DPT 3 in accordance with Rule 16 of the Companies (Receipt of Deposit) Act, 2014.
Appointment of CFO or CS or CEO:Section 203 read with Act 8 and Act 8A of the Companies Act, 2014 requires the appointment of a CFO or CS or CEO within 30 days of the AGM or 6 months if there is a temporary vacancy. Form MGT 14 or DIR 12 is completed.
Annual General Meeting:The budget announcement AGM must be held in accordance with Section 96 of the Companies Act, 2013.
CSR Committee:The CSR Committee must hold four meetings with a minimum of 120 days between the two meetings held to discuss and approve CSR activities. This is done under the Companies Act, 2013 read with the Companies Act, 2014 and the Secretarial Standard.
Director Disclosure:The directors are required to disclose any financial interest in the Company through Form MBP 1 in accordance with Section 184 (1) of the Companies Act, 2013 read with Act 9 (1) of the Companies Act (Board Meetings and Its Powers), 2014..
Annual General Meeting:The Annual General Meeting must be held in accordance with Section 121 (1) of the Companies Act, 2013. Form MGT-15 must be completed once the AGM has taken place.
Financial Statements:The Company’s Financial Statements must be completed in accordance with Section 137 of the Companies Act, 2013, read with Rule 12 (2) of the Companies Act (Accounts), 2014. Integrated, meaning prepared by XRBL (Extended business reporting system). This is filed in Form AOC 4
Annual Return:This must be filed in accordance with Section 92 of the Companies Act. 2013 is read with Act 11 (1) of the Companies (Administration and Management) Act, 2014. The Annual Return Form contains information about directors and shareholders and is required to be filed with Form MGT7 and the relevant ROC.
Financial Report and Director:Admission to the financial report by the director will be made in accordance with Section 173 of the Companies Act read with Secretary 1 level. The filing of the file is done in the form of MGT 14.
Income Tax Returns:This must be submitted to the Department of Revenue on form ITR 6 on or before 30 September of the financial year.
Clerk Audit Report:Submission of the Secretariat is required under Section 204 of the Companies Act, 2013 read with Act 9 of the Companies Act, 2014. The secretariat report must be submitted only if the total amount paid by the Company is equal to or exceeds Rs. 50 crores or annual profit equals or exceeds INR 50 crores or annual profit exceeds Rs.250 crores. This completion is done on Form MR 3
Other compliance:This includes the rules and regulations laid down by SEBI. The listed companies must comply with the 2015 regulations.
Frequently Asked Questions
A director must be over 18 years of age and must be a natural person. There are no restrictions on citizenship or residency. Therefore, even foreigners can become directors of Indian Private Limited.
The address in India where the Company’s registered office will be located is required. The properties may be commercial / industrial / residential where communication from the MCA will be obtained.
Company authorized capital is the number of shares a company can give to shareholders. Companies must pay the Government an authorized shareholding fee for the Company. Companies must pay a maximum authorized fee of at least Rs.5 lakhs.
Identity documentation and proof of address are mandatory for all proposed directors of the Company. The PAN card is an obligation for the people of India. In addition, the property owner of the registered office premises must provide a Certificate of Non-Disclosure of having a registered office on his or her premises and must provide his or her identity document and proof of address.
There are a number of inclusion benefits such as providing Limited Credit Protection, transfers, borrowing capacity, and more.